After a few big steps toward customer advocacy, the pharmaceutical business seems to have taken a big step back.
The most recent indictment against the industry started brewing in late January when The New York Times published documents showing that senior leadership at Eli Lilly withheld potential side effect information from patients taking the antipsychotic drug Zyprexa. Zyprexa, the report claimed, caused diabetes and high blood sugar. Eli Lilly has already paid $1.2 billion to settle the claims of more than 26,000 former Zyprexa patients. That's almost a third of its total $4.2 billion in global 2005 sales of the drug.
Just weeks later a judge in Ontario, Canada, agreed to hear a $100 million lawsuit against pharma giant Jannsen-Ortho regarding its digestive drug Prepulsid, which caused several deaths and illnesses in Canada "while patients were kept largely in the dark about the medicine's possible side effects," according to The Canada Post.
Exactly how committed is the pharmaceutical business to its patients and prospective customers? Episodes such as Eli Lilly's and Jannsen's shine a harsh light on the secrecy involved in the research and development of drugs, the communication to patients about side effects, and even the business model that dictates that "blockbuster" drugs drive this business. Zyprexa, for example, accounted for 29 percent of Lilly's 2004 revenue.
While most industries are working to engage customers, communicate with them at any cost, and even curry favor through influence campaigns, the pharmaceutical business still lags.
Part of the problem is the culture in most pharmaceutical firms. Pharma companies have only recently started to market their products and have traditionally relied on "request marketing." That means they waited for doctors and patients to request their drugs after simply letting them know they existed. "Walk into [Procter & Gamble] and you'll get the sense that this company is all about marketing and full of people who have been operating that way for decades," says Prospectiv CEO Jere Doyle. "[Pharmaceutical companies] are still based on research and selling to doctors."
According to David Zaritsky, director of the healthcare practice of Harte-Hanks, pharmaceutical companies are about 10 years behind financial services and retail when it comes to customer-centric sales and marketing. "They used to feel like they've been handcuffed by HIPAA regulations, but I think for many executives they've had enough of that attitude," he says. "I see companies like AstraZeneca, Merck, and Genentech doing a good job of finding out about customer channel preferences, forming customer connections, and at least starting to be brand-centric."
The public scrutiny of pharmaceutical companies has forced them to start making changes to how they treat customers. Zaritsky points out that many pharmaceutical companies have improved significantly from just two years ago. That was when Merck and Pfizer were shown to have withheld information about side effects from anti-inflammatory drugs Vioxx and Celebrex. Both companies paid millions in lawsuits. The aftermath of the Vioxx and Celebrex controversies produced almost immediate progress. Organizations representing all parts of the industry joined together to form the International Federation of Pharmaceutical Manufacturers & Associations, making all clinical trial information available through the Web site www.ifpma.com. Merck in particular showed a very different approach to both its doctor and end-user customer bases. It set up a Web site for both doctors and patients to access information about the voluntary withdrawal of Vioxx, as well as a detailed defense of its initial clinical trials.
The pharmaceutical and healthcare industries have made so much progress over the past two years that 2006 was the first time any organization affiliated with them dared to award customer advocacy campaigns. Selected by healthcare research company Insight Forums, 47 companies nominated their own customer advocacy campaigns. They ranged from Merck's outreach program to Hispanic patients to Takeda's informational Web site about sleep issues in support of patients who need its sleep aid Rozerem. The winner was Cytyc, a company that provides women's oncology drugs to physicians and hospitals, but reached out beyond those relationships to give potential patients information on cancer symptoms via several Web sites. The pharmaceutical business may not have any choice but to continue on the path of companies like Merck and Cytyc and become more customer centric.
"I think they will change," says Katherine Binns, president of Harris Interactive's Healthcare Division. "Don't expect them to change quickly because it is an unpredictable business. Betting everything on developing these blockbuster drugs and the way they come to market is leading to the impression that profits come before patients, it's attracting increased scrutiny, and the return on investment is declining. It may not be a sustainable approach."
One of the early customer strategies coming out of the pharmaceutical business is called "patient optimization." The term sounds a bit cold and clinical, but it's actually as close as the business has come to developing customer loyalty.
It's based on data that shows the numbers of patients who don't take their medicine. A Harris Interactive survey showed that the majority of Americans who are prescribed a course of medication don't finish it. Ninety-six percent of the survey respondents indicated that they had some level of concern about adverse reactions to prescription drugs that are taken as directed. And 76 percent of these respondents were fairly extremely concerned about adverse reactions.
Many experts say pharmaceutical companies first need to form relationships that can consistently remind patients of their need to stay on long-term treatments. As drug introductions get more expensive and risky to execute, making sure existing drugs are prescribed as often as possible and then used properly is important. Many companies such as Merck and AstraZeneca have turned this problem into an opportunity by creating Web sites and marketing collateral that remind patients to stay on their treatments for conditions such as high blood pressure, high cholesterol, depression, and arthritis.
"This is the beginning of change," says Harte-Hanks' Zaritsky. "Patient optimization focuses on the patient experience. It accepts that patients interact with the brand and product at times when they're not sick. It starts to move toward the ability to calculate lifetime value. It shows patients that the company providing their medication understands that experience does not come in a pill."